Question

What is Economics? Please respond to the following:

Identify a recent purchase that you made and determine how scarcity influenced your purchase decision.
a) Scarcity did not influence my purchase decision.
b) Scarcity led me to choose a more expensive option.
c) Scarcity led me to choose a less expensive option.
d) Scarcity led me to postpone my purchase.

Give an example of how scarcity of a product would have an impact on a microeconomic level. Please explain your rationale.
a) Scarcity increases the price of the product.
b) Scarcity leads to an oversupply of the product.
c) Scarcity encourages investment in alternative products.
d) Scarcity has no impact on microeconomic levels.

Answer 1

Economics is the study of how humans make decisions in the face of scarcity. Scarcity influenced my recent purchase decision when I wanted to buy a new laptop, and I had to choose a less expensive option. On a microeconomic level, scarcity of a product can increase its price.

Step-by-step explanation:

Economics is the study of how humans make decisions in the face of scarcity. Scarcity means that human wants for goods, services and resources exceed what is available. Resources exist in limited supply and individuals have to make choices based on their limited resources.

Scarcity influenced my recent purchase decision when I wanted to buy a new laptop. As a college student, I had a limited budget, so I had to choose a less expensive option to stay within my budget.

On a microeconomic level, scarcity of a product can have an impact by increasing its price. When a product is scarce, the demand for it exceeds the supply, causing the price to rise. For example, if there is limited supply of a trendy fashion item, the price may increase due to its scarcity.